Gas prices predicted to rise by May

Enjoy those low gasoline prices while you can – one forecast says filling up could cost more than $3 a gallon in just a few months.

The forecast released Wednesday by GasBuddy.com, which tracks gasoline prices around the country, calls for a yearly national average price of $2.70 a gallon, a few cents a gallon lower than 2018. But it also forecast that prices will rise early in the year, possibly topping $3 a gallon by May.

That should represent the peak in prices, said Patrick DeHaan, the head of petroleum analysis for GasBuddy, and the direction of prices for the rest of the year will depend heavily on the national economy.

DeHaan said the current strong economy, coupled with production cuts by oil-producing countries, will be behind the increase in prices. But, he said, higher gas prices could then contribute to a cooling in the economy, and if that comes to pass, prices will come down later in the year to reflect the softening demand.

“Buckle up for the extra volatility we’re going to see – it could be nauseating,” DeHaan said.

Current gasoline prices are low – it’s selling for under $2 a gallon in some places. The national average last week, according to GasBuddy, was $2.25 a gallon, and in Maine the average was $2.29 a gallon. There’s a disconnect between gasoline and heating oil prices, which have remained stubbornly high, particularly in New England.

On Tuesday, President Trump appeared to take credit for the low gas prices, tweeting, “Do you think it’s just luck that gas prices are so low, and falling? Low gas prices are like another Tax Cut!”

Gas prices in Maine peaked near $2.90 a gallon earlier this year and have been falling steadily since October, because of a glut of gasoline on the market.

DeHaan said he expects prices to continue to fall in January and remain low in February, but then the trend will reverse and pump prices will start to rise, topping out in about four months at more than $3 a gallon, particularly in the nation’s largest metro areas.

Last year, GasBuddy forecast an annual 2018 average price of $2.57 a gallon and a peak price of $2.89 a gallon in April. The reality was a little higher, with an average of $2.73 a gallon and a high of $2.98 a gallon on May 24.

Americans spent nearly $390 billion on gasoline last year, DeHaan said, and the average household’s annual bill at the pump was $2,016. He said those figures should fall slightly in 2019 to $386 billion and a household average of $1,991.